Tzipi Livni and her centrist Hatnua party will be part of a government headed by Likud-Beitenu, the political movement headed by the prime minister. Livni, a former opposition leader, foreign minister and justice minister, will again serve in the justice minister post.

Hatnua, which means "movement," is the first party to join a Netanyahu's coalition.

There has been a lot of political jockeying among a range of movements since last month's national elections. Among those are centrists, rightists, and ultra-Orthodox groups.

Netanyahu, who was chosen to pick a government after his party won the most votes in the election, wants to build a broad coalition -- one that easily surpasses the 60-seat majority in the 120-member Knesset, Israel's parliament.

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"The threats coming from Iran, Syria and the Hezbollah have not stopped for a moment and in order to give an answer to these threats we need to form a wide and stable government," Netanyahu said.

Livni, who campaigned on the importance of the peace process, thanked Netanyahu.

"The obligation to the diplomatic process and the confidence that has been bestowed on us led to this partnership, a partnership that came about after we had talks and I received the appropriate powers to be the negotiator of the State of Israel to get to the end of the conflict with the Palestinians on the basis of the two-state solution," she said.